In a move that took economists by surprise, the Bank of England’s Monetary Policy Committee (MPC) today announced that they are going to pump a further £75bn into the economy through quantitative easing (QE).  This is the first change to QE easing measures since 2009 and takes the Bank’s asset purchases including government bonds to £275bn. 

Following the announcement the FTSE 100 surged . By lunchtime it was up over 2% as the markets reacted favourably to the news.

However, the move may not have the desired effect.  More QE could increase inflation and reduce long term gilt yields.  This could have a huge impact on pension benefits at retirement.

The Bank also voted to keep interest rates at the record low of 0.5%  ( originally set in March 2009 )  but for how long is anyone’s guess. Don’t rule out a reduction.